Federal Board of Revenue (FBR) will not ask source of money to be invested till December 31, 2020 in a new housing projects, Abdul Hameed Memon, Chief Commissioner, Inland Revenue, Medium Taxpayers Office (MTO) said on Wednesday.
“This is a unique program announced by the Prime Minister of Pakistan. The tax rates have also been reduced under this package,” he said while addressing an event organized by Association of Builders and Developers (ABAD).
However, he said that those who availed the scheme will require to complete the project by September 2022.
He urged the ABAD members to avail the opportunity as growth in the construction sector would generate employment.
He said that the government through amendment in tax laws had announced the package for the construction sector. “The package has two types of benefits: immunity from questioning the source of investment; and reduced rate of income tax in the shape of a fixed tax regime for builders and developers.”
Earlier, Abdul Hafeez, Commissioner Inland Revenue, MTO gave a detailed presentation to builders and developers on the immunity from Section 111 of Income Tax Ordinance, 2001. This section attracts penal action for persons who conceal assets from tax authorities.
The commissioner said that the section 111 would not apply to an individual if the person deposited the money in a new bank account up to December 31, 2020 or having ownership / title of the land invested as on April 17, 2020.
In case of a company or an Association of Persons (AOP), the section shall not apply if a single purpose company or AOP is registered between April 17, 2020 and December 31, 2020.
The commissioner outlined other exemptions and benefits under the tax package as the investors would have exemption from the requirement of withholding tax on purchase of building material except cement and steel.